Matheson, F.J. v Matheson, F.J

[1994] FCA 199

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199      99

JUDGMENT No. .......,...,....., / .,,, ...,,...

IN THE FEDERAL COURT OF AUSTRALIA	1
GENERAL DIVISION	1 No. QB 206 of 1993
BANKRUPTCY DISTRICT OF THE STATE OF OUEENSIAND

RE:	Frederick James MATHESON
EX PARTE:	Frederick James MATHESON

Applicant

AND :  Ivor WORRELL

Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:	Spender J.
DATE OF ORDER:	14 April 1994
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

the application filed 29 December 1993 be dismissed with

costs, to be taxed if not agreed.

NOTE:	Settlement and entry of orders is dealt with in Rule
124 of the Bankru~tcv  Rules.

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION I

No. QB 206 of 1993

BANKRUPTCY DISTRICT OF THE	1
STATE OF OUEENSLAND	1

RE :	Frederick James MATHESON
EX PARTE:	Frederick James MATHESON

Applicant

AND :  Ivor WORRELL

Respondent

C O W :	Spender J.
PLACE :	Brisbane
m:	14 April 1994

REASONS FOR JUDGMENT

This is an application on behalf of a bankrupt, Frederick James Matheson ( 'Mr Matheson') for an order that the Court remove Ivor Worrell as trustee of Mr Matheson's estate. The application is brought pursuant to S. 179 of the

Bankru~tcv Act 1966 ('the Act') which relevantly provides:

" The Court may, on the appl icat ion of.. . the

bankrupt, inquire i n t o the conduct o f a t rus t ee

i n r e l a t i o n t o a bankruptcy and	may do	one	o r
both o f the following:-
( a )	remove	the t rus t ee from	o f f i c e ; and

(b) make such order as i t thinks proper. "

As appears from an affidavit of Mr Matheson filed on 21 December 1993, the basis of his application is his belief that the interests of his trustee in administering the estate have not been in the interests of all parties. In particular, Mr Matheson says that on 1 October 1993 he made a proposal to his trustee that an offer be made to his creditors equivalent to paying each creditor the sum of ten cents in the dollar of their claim, but that the trustee informed the bankrupt that such an offer was not acceptable and that he would not place that offer before the creditors. A further complaint by Mr Matheson is that he has sought details of the fees charged in respect of the administration of his estate but that he has been refused details of those fees.

Mr Matheson says that it is his belief that, had his

offer to creditors been put before the creditors and had they been fully aware of what funds would have been left for distribution after administration and payment of fees, it would have been in the best interests of creditors to have accepted that offer. As a consequence, the submission on behalf of Mr Matheson is that the trustee had not acted in the best interests of the bankrupt estate.

It is clear that the trustee has sworn an affidavit of 26 August 1993 which in a significant respect is wrong. I

have had full regard to that circumstance. Mr Worrell in that affidavit said that monies approximating $22,000,00 owed to the Matheson family trust (a trading trust of which M r Matheson is sole trustee) by the Port of Brisbane Authority:

" i s c u r r e n t l y i n v e s t e d i n a j o i n t account

be tween m y s e l f and t h e T r u s t ' s s o l i c i t o r

pending r e s o l u t i o n o f t h e i s s u e s i n t h e

bankrupt e s t a t e . "

Mr Matheson says that he understood:

"	[ I ] t was agreed between M r I v o r W o r r e l l and
John McGaw [a solicitor for the trust] on
b e h a l f o f the Matheson Family T r u s t on the
28th d a y o f J u l y , 1993 t h a t moneys h e l d by
the P o r t o f Br isbane A u t h o r i t y i n the sum o f
$22,010.00 were t o be placed i n a j o i n t t r u s t
account and I v o r Worrell was o f the o p i n i o n
t h a t these moneys had been p laced i n the
j o i n t t r u s t account a t the t i m e o f swear ing
o f the A f f i d a v i t . "

Later, on 20 October 1993, counsel for the trustee indicated to the court that a bank account could be produced showing the funds had in fact been deposited as stated in the affidavit of the trustee. The true position was that the funds had not been so deposited.

A further basis of complaint is that the bankrupt alleges that a solicitor who had previously acted for the petitioning creditor on the petition and who had since acted for the trustee, had been the subject of civil proceedings by the bankrupt for damages for assault and that as a consequence:

" Ivor Worre l l h a s n o t and cannot d i s c h a r g e his

d u t i e s i n an unbiased manner due t o the

c o n f l i c t o f interests p r e v a i l i n g . "

In an affidavit filed 7 February 1994 Mr James Bridson Walker, the solicitor referred to by the bankrupt, says that as a result of a complaint by Mr Matheson to the Queensland Law Society, he responded on 6 August 1993 and that he has since heard nothing further from the Queensland Law Society in respect of that complaint and that no civil proceedings have been initiated by Mr Matheson against him to Mr Worrellls knowledge. He denies the substance of M r Matheson's complaint.

It is in my opinion not irrelevant to note that on 26 August 1993 the Queensland Law Society Inc. wrote to Mr Matheson in response to his letter of 18 August 1993, which letter from the Queensland Law Society stated, in part:

" We note that the incident in question occurred on 14 November 1992. Would you also kindly inform us why you did not complain to the Society more promptly. Although your letter was dated 16 February 1993, we confirm that it was not received by the Society until 28 July

1993. "

It is clear from the affidavit of the trustee sworn on 4 February 1994 that there are serious and acrimonious disputes between Mr Matheson and Mr Worrell. The trustee alleges, not without some basis, it seems to me, that there has been a failure by the bankrupt to disclose some unsecured liabilities, nor has there been complete candour concerning

Mr Matheson's position and his obligations to the Matheson	family Trust. I can see no impropriety at all in the conduct
of the trustee concerning the proposal by Mr Matheson in relation to the calling of a meeting of creditors to consider an offer of ten cents in the dollar.
No complaint has been received from any creditor concerning the trustee's administration of the bankrupt estate.
Having regard to the contents of Mr Worrell's affidavit sworn 4 February 1994 and having regard to the other
matters on which Mr Matheson urges the court to act pursuant to S. 179, in my view, nothing presently before the court satisfies me that I should make the order sought by the bankrupt.
The application filed 29 December 1993 is dismissed with costs, to be taxed if not agreed.

I certify that this and the preceding four ( 4 ) pages are a true copy of the reasons for judgment herein o f the Honourable h2 Justice spender.

Associate

Date: 14 April 1994

The applicant appeared in person.

Counsel for the respondent :	M r Eleftheriou
Solicitors for the respondent :	James Walker
Date of Hearing:	8 February 1994